WEEK 3:

PLANNING
INFORMATION &
TECHNIQUES
TPS 552 : PLANNING TECHNIQUES & MODELLING
TOPIC 2 : DECISION MODELS OF CHOICE & CHANCE &
CORRELATION
By : TPr Dr. Noraini binti Omar Chong
 TOPICS
Today’s lecture

TOPIC 1 TOPIC 2 TOPIC 3 TOPIC 4 TOPIC 5

Introduction Planning Information Models of Urban Understand Making Decision and
and Techniques System Economic Condition Evaluating Program

 Background  Introduction  Reily’s Law and  Basic and Non-  Cost

Mapping Trade Basic Effectiveness
 The role of  Collections of Data
Model
modeling and  Land use  Input-Output
 Analyzing Data
techniques in urban forecasting  Goal
 Location Quotient
planning  Decision Models of Achievement
 Basic Sector
Choice and Chance  Shift Share Matrix
 Definition of Land Use
Analysis
modeling and its  Correlation Models  Sustainability
uses Assessment
 Regression Analysis
 Urban system and  SWOT Analysis
 Linear Regression
planning process
Analysis & Multiple
 Goals and Needs: Regression Analysis
Need Gap Analysis.
 1.4
Decision 1.5
2.0 Models of
Correlation
Choice &
PLANNING Chance

INFORMATION &
TECHNIQUES
Presentation Title
Presentation title 3
1.4 Decision Models of Choice and Chance

i. Model is the representation of the real

phenomenon;

ii. Choice are the different alternatives;

iii. Chances are the probabilistic risk (chance of

something adverse occurring)
Definition of Choice & Chance in Decision Making

❑ Decision making is the process that includes evaluation of

the available alternatives, the chances of risk in the
alternatives, and making one choice out of all the
alternatives.

❑ The choices are the different alternatives, and chances are

the probabilistic risk among them in the decision-making
process.
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The Process…………
Identify Gather Determine Evaluate Make final Implement
need information alternatives alternatives choices decision

IDENTIFYING NEED to make the decision – The
area or objective where the decision needs to be
made.
GATHERING INFORMATION for it – The information
required for making the decision for the objective. MAKING THE FINAL CHOICE or decision –
DETERMINING OTHER OPTIONS – Identifying all
the options through which the target or the
objective can be achieved achieve.
Planning Information & Techniques
CONCLUDING OUT OF EVERY ALTERNATIVE –
Hypothetically implementing each alternative
and concluding the outcome under each
alternative.
Evaluating each outcome under each alternative,
choosing the final alternative that gives the best
result.
IMPLEMENTING THE DECISION – Implementing
the final chosen alternative for accomplishing
the motive
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 There are 3 main conditions faced by the
decision maker in making a decision: condition
of uncertainty, condition of risk, and condition
of certainty.

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 ● Probability approach used to make sound and accurate
decisions

● Gives the estimation of success and failure to the decision-

make
The
● Chance of properly analyzing the chances of risk at every
stage of the decision process and in each alternative.
Probability
● The probabilistic approach estimates the condition of
uncertainty, condition of risk, and condition of certainty
Approach
● Every condition has a different probability of having a
positive and negative outcome
SLIDESMANIA.COM

● Decision-maker can evaluate every choice option available to

make proper decisions under the probabilistic approach.
Decision Making Conditions

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 Condition of Uncertainty
• Decision-maker or the analyst has no knowledge or information about any alternative & needs to
gather information for each of the alternatives to evaluate
• Skills needed in this state are proper analysis, judgment, and experience in decision-making
• The chances of making the wrong decision under this state are significantly less.

Condition of Risk

• Decision-maker has the probabilistic estimation of outcomes under each alternative

• The chances of making a wrong decision under the state of risk are moderate
• There are equal chances of getting positive outcomes and negative outcomes
• The decision-maker knows both the probabilistic(option that cannot be certain) outcomes.

Condition of Certainty
• Decision-maker knows the probability of certainty in the decision's outcome/ the probability of certainty lying
with each alternative and with its outcomes
• Decision-maker knows the chances of risk and conditions lying under each alternative.
• The chances of making the wrong decision are higher, because the decision-maker does not perform the
proper evaluation and analysis techniques.
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 Example of Tools for Decision Analytic Model

Decision Tree Markov Model

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1.5 Correlation Analysis

i. Used to quantify the association between two (2)

continuous variables.

ii. Between an independent and a dependent variable

OR between two independent variables
Variables
❑ A variable is an object, event, idea, feeling, time period, or any other type of
category you are trying to measure. There are two types of variables-
independent and dependent.

❑ Independent Variable (IV) stands alone and isn't changed by the other
variables you are trying to measure. It is the variable that is changed or
controlled to test the effects on the dependent variable.

❑ Dependent Variables (DV) is something that depends on other factors. It is the

variable being tested and measured.

❑ Usually you are looking for a relationship between two things. You are trying
to find out what makes the dependent variable change the way it does.

Planning Information & Techniques 13

Variables
❑ Just remember: (Independent variable) causes a change in (Dependent
Variable) and it isn't possible that (Dependent Variable) could cause a change
in (Independent Variable)

❑ Example: (Time Spent Studying) causes a change in (Test Score) and it isn't
possible that (Test Score) could cause a change in (Time Spent Studying).

Planning Information & Techniques 14

Correlation Analysis
❑ In correlation analysis, we estimate a sample correlation coefficient, more
specifically the Pearson Product Moment correlation coefficient. The sample
correlation coefficient, denoted r, ranges between -1 and +1 and quantifies the
direction and strength of the linear association between the two variables. The
correlation between two variables can be positive (i.e., higher levels of one
variable are associated with higher levels of the other) or negative (i.e., higher
levels of one variable are associated with lower levels of the other).
❑ The sign of the correlation coefficient indicates the direction of the
association. The magnitude of the correlation coefficient indicates the strength
of the association.
❑ For example, a correlation of r = 0.9 suggests a strong, positive association
between two variables, whereas a correlation of r = -0.2 suggest a weak,
negative association. A correlation close to zero suggests no linear association
between two continuous variables
Planning Information & Techniques 15
Correlation Analysis
❑ In It is important to note that there may be a non-linear association between
two continuous variables, but computation of a correlation coefficient does not
detect this. Therefore, it is always important to evaluate the data carefully
before computing a correlation coefficient. Graphical displays are particularly
useful to explore associations between variables.

❑ The figure below shows four hypothetical scenarios in which one continuous
variable is plotted along the X-axis and the other along the Y-axis.

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Correlation Analysis

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Try to give scenarios on these correlations…

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 Scenario 1 depicts a strong positive association (r=0.9), similar to what we might see for the correlation between
infant birth weight and birth length.
Scenario 2 depicts a weaker association (r=0,2) that we might expect to see between age and body mass index
(which tends to increase with age).
Scenario 3 might depict the lack of association (r approximately 0) between the extent of media exposure in
adolescence and age at which adolescents initiate sexual activity.
Scenario 4 might depict the strong negative association (r= -0.9) generally observed between the number of
hours of aerobic exercise per week and percent body fat.
Planning Information & Techniques 20
Scatter Plots
❑ Scatter plots show the joint behavior of two interval variables. If you want to decide
whether two interval variables are related in any way you should first draw a scatter plot.
❑ Scatter plots have 2 axes:
1. the value of the dependent or response variable on the y axis.
2. the value of the independent variable on the horizontal axis.

Planning Information & Techniques 21

 Group Task
Internet searching on:

Decision Model
1. Decision Tree
2. Markov Model

Correlation Analysis
1. Bivariate Pearson Correlation
2. Spearman Correlation
Planning Information & Techniques 22
Thank you
TPr DR. NORAINI BINTI OMAR CHONG
norainiomar@uitm.edu.my
+6019 939 1020